Here's our summary of key economic events overnight that affect New Zealand, with news the consequences of the grim pandemic toll is overwhelming investor sentiment.
First, jobless claims in the US last week came in at just over +1.4 mln and this was higher than expected and higher than the prior week (which itself was revised higher). This is the first rise in these claims since late March and might very well indicate a grim turning point in the post-re-opening period. The number of American on these benefits was 16.2 mln and down -1.1 mln from the prior week. Those that first claimed in early March are now starting to fall off the benefit rolls as their entitlement time expires. The future doesn't look bright for them and it is a trend that will only accelerate with substantial social consequences.
This and the worsening pandemic death count is getting investor attention this morning. Wall Street is down -1.3% so far today in a building sell-off. Overnight, European markets were basically flat with little change. Yesterday, Shanghai slipped -0.2% while Hong Kong rose -0.8%. Tokyo fell -0.6%. These were all after the ASX200 closing up +0.3% and the NZX50 Capital Index closing down -0.3%.
The bond market is also flashing warning signals.
And the gold price is up sharply again today and just below its all-time high.
EU consumer confidence isn't improving, holding in July at the same negative level as in June.
And there are more indications there is unlikely to be any EU-UK trade deal and the two are heading for the 'hardest' of separations.
In Australia, their federal government has delayed its Budget update until October, and yesterday revealed it ran a deficit of -AU$85 bln in the 2019/20 fiscal year (a year that started out with claims it would be in surplus). Their deficit is projected to grow even further this financial year, with their Government forecasting a blowout of more than -AU$184 bln in 2020-21. Taxes collected are expected to fall by about -AU$100 bln. If that all eventuates, it will be a deficit -9.2% of GDP, but it is likely to be worse and closer to -10% of GDP. They are also predicting their unemployment rate will exceed 9% by the end of this year. Others see it going much higher.
The latest compilation of COVID-19 data is here. The global tally is 15,302,000 and that is up +286,000 since this time yesterday. Global deaths reported now exceed 625,000 (+8,000).
A quarter of all reported cases globally are in the US, which is up +72,900 from this time yesterday to 4,135,800. US deaths now exceed 146,700 and a death rate of 443/mln (+4/mln) with the expected rise now kicking in as their lack of personal responsibility starts to have consequences. The number of active infections in the US is now up +16,000 in a day to 2,035,100.
In Australia, there have now been 13,306 cases reported, another +410 since this time yesterday, and still concentrated in Victoria but growing in NSW in Sydney's suburbs. Their death count is up to 133 (+5). Their recovery rate has slipped back further to 66%. There are now 4398 active cases in Australia (up +283 in a day) and almost all are community transfer.
The UST 10yr yield has dipped by another -2 bps to 0.58% and a new three month low. Their 2-10 curve is unchanged at +44 bps. Their 1-5 curve is soft at +12 bps, and their 3m-10yr curve has dipped slightly to +49 bps. The Aussie Govt 10yr yield is unchanged at 0.87%. The China Govt 10yr is also little-changed at 2.92%. The NZ Govt 10 yr yield is down -2 bps at 0.85%.
The gold price is higher yet again today, up another +US$25 to US$1,888/oz. The silver price hasn't risen in tandem today however.
Oil prices are soft again today. They have slipped to just over US$41.50/bbl in the US and the international price is just over US$43.50/bbl.
And the Kiwi dollar will start today lower at 66.4 USc. Against the Australian dollar we are now at 93.4 AUc. Against the euro we lower at 57.2 euro cents. That means our TWI-5 has dipped to 70.2 but still in the range it has found itself over the past two months.
The bitcoin price has started a run higher today, up +2.7% since this time yesterday and now at US$9,625. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».